Monday, October 5, 2009

Romania leftists to support IMF reforms-party chief

By Marius Zaharia

BUCHAREST, Oct 3 (Reuters) - Romania's Social Democrats (PSD) pledged on Saturday to support the government's efforts to meet conditions for IMF aid, after suddenly quitting the ruling coalition this week in a row with their centrist partners.


Their support in parliament for fiscal reforms and job cuts is vital for Bucharest to continue meeting the terms of its 20 billion euro anti-crisis aid package, which economists said was at risk in the wake of the split in the coalition.


Investors were concerned Prime Minister Emil Boc's weakened cabinet would not gather enough support to pass crucial pension and budgeting reforms and ensure cutbacks needed to keep deficit targets, which hit the leu currency and the Bucharest bourse.


But the PSD, long seen as less fiscally restrictive than its centrist rivals, is in a difficult position before the Nov. 22 presidential election because its core electorate, the powerful public sector trade unions, oppose some of the fiscal changes required by the IMF.


"We need to reassure our international partners that I have every intention the programme should continue," Mircea Geoana, the PSD candidate for president, told reporters.


"Romania has no other option ... I don't think there will be a delay in disbursements."
Geoana argued the PSD was in a better position to secure backing for reforms from trade unions because of its close links to the groups, which plan a series of protests next week.


"It's like a peace process," he said. "We know how to (introduce fiscal reforms) in ways that are less abrasive and more acceptable."


Romania went through a sharp economic reversal in the past year because of the global financial crisis. It shifted from being the European Union's fastest-growing economy to one in dire need of IMF aid to prevent a financing crisis.


Geoana said the economic crisis would top the agenda of the election debate and that he planned to propose a set of measures to boost jobs and investment in agriculture, including a social housing project.


He is running a close second in opinion polls behind incumbent President Traian Basescu, who has close links to the ruling Democrat-Liberal Party.

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